KOLON GLOBAL has transitioned all project financing (PF) business sites from the initial stage of a bridge loan to the main PF stage.
According to the real estate finance industry on the 24th, KOLON GLOBAL provided a debt guarantee worth 220 billion won to 'Intention Development Co., Ltd.,' the implementing company for the 3rd development project of the mixed-use complex in Seonhwa-dong, Daejeon, on the 21st. The main lenders include Hana Bank and three others, with the debt guarantee period running from the 21st of this month to Nov. 21, 2029, spanning 4 years and 8 months.
On the same day, KOLON GLOBAL lent 98 billion won to Intention Development Co., Ltd. for project costs. The annual interest rate on the loan is 6%, and the lending period is until 90 days after the completion date of the development project, specifically until Sept. 8, 2029.
The 3rd mixed-use development project site in Seonhwa-dong, Daejeon, was the only site among several business sites that KOLON GLOBAL was advancing through real estate PF loans that remained stuck in the bridge loan stage.
To secure initial project costs, KOLON GLOBAL issued asset-backed short-term commercial paper (ABSTB) on March 21 last year and obtained a bridge loan of 268 billion won from financial institutions. To secure credit for the bridge loan, KOLON GLOBAL reinforced its credit through a commitment of 'conditional debt assumption in case of failure to provide funding.'
The relocation of the Daejeon CMB broadcasting station, which was one of the challenges to resolve prior to the transition to the main PF, has also been completed at the end of January, beginning the demolition process on the development site in Seonhwa-dong, Daejeon.
There were concerns that the scale of the bridge loan, which was 700 billion won at the end of December 2023, two years ago, posed significant risks for PF contingent liabilities.
However, with the successful conversion to the main PF for the mixed-use complex business site in Bongmyeong-dong, Daejeon (249.5 billion won) in March last year and the mixed housing site in Ya-eum-dong, Ulsan (202 billion won) in May, the burden of contingent liabilities was alleviated. Following this, the mixed-use complex business site in Seonhwa-dong, Daejeon, transitioned to the main PF stage in March this year, reducing KOLON GLOBAL’s bridge loan business sites to "zero" (0).
The 3rd development project of the mixed-use complex in Seonhwa-dong, Daejeon, involves constructing a project of 998 apartment units and 92 officetel units spanning 5 underground floors and 49 above ground at 95-3 Seonhwa-dong, Jung-gu, Daejeon.